The long-term goal of the proposed work is to determine how sister chromatid cohesion proteins control gene transcription. This will illuminate mechanisms that underlie certain human genetic syndromes and cancers. Cohesin topologically encircles sister chromatids to hold them together until a cell divides. Moderate reductions in cohesin activity don't disrupt chromatid cohesion, but alter gene transcription, leading to poor growth and development. High cohesin activity is linked to poor prognosis in multiple cancers. How cohesin controls transcription is largely unknown, but current evidence argues that it participates directly in multiple mechanisms. Recent discoveries argue for a new paradigm in which a balance between cohesin and the Polycomb Repressive Complex 1 (PRC1) epigenetic silencing complex globally controls both gene silencing and transcription of many active genes. The data argue that cohesin directly facilitates binding of PRC1 to active genes, where PRC1 prevents paused RNA polymerase II (Pol II) at the promoter from prematurely entering into elongation. They also suggest that cohesin at active genes sequesters PRC1, thereby controlling how much is available for gene silencing, and that PRC1 limits cohesin binding at silenced and active genes. The goal of this proposal is to test this new paradigm, and determine the mechanisms by which cohesin and PRC1 together control both gene silencing and transcription of active genes. The proposed studies combine biochemical, genetic, genomic, and biophysical approaches to test key predictions of the current model. Aim 1 tests the ideas that cohesin physically interacts with PRC1 to directly facilitate PRC1 binding to active gene promoters, and that PRC1 limits cohesin binding through interactions with cohesin loading or removal factors. Aim 2 tests the idea that PRC1 prevents premature entry of paused Pol II into elongation by facilitating NELF and DSIF pausing factor or Pol II kinase activities. The insights into the mechanisms by which cohesin and PRC1 control transcription provided by these studies should suggest new methods for correcting cohesin-PRC1 imbalances in genetic syndromes and cancer.